[Congressional Record Volume 168, Number 200 (Thursday, December 22, 2022)]
[House]
[Pages H9990-H10002]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PRESIDENTIAL TAX FILINGS AND AUDIT TRANSPARENCY ACT OF 2022
Mr. NEAL. Madam Speaker, pursuant to House Resolution 1529, I call up
the bill (H.R. 9640) to amend the Internal Revenue Code of 1986 to
provide for examination and disclosure with respect to Presidential
income tax returns, and ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mrs. Luria). Pursuant to House Resolution
1529, the bill is considered read.
The text of the bill is as follows:
H.R. 9640
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Presidential Tax Filings and
Audit Transparency Act of 2022''.
SEC. 2. EXAMINATION AND DISCLOSURE WITH RESPECT TO
PRESIDENTIAL INCOME TAX RETURNS.
(a) Audit.--Subchapter A of chapter 78 of the Internal
Revenue Code of 1986 is amended by redesignating section 7613
as section 7614 and by inserting after section 7612 the
following new section:
``SEC. 7613. EXAMINATION WITH RESPECT TO PRESIDENTIAL INCOME
TAX RETURNS.
``(a) In General.--As rapidly as practicable after the
filing of any Presidential income tax return, the Secretary
shall conduct an examination to ascertain the correctness of
such return and enforce the requirements of this title with
respect to the taxable year covered by such return.
``(b) Reports.--
``(1) Initial report.--Not later than 90 days after the
filing of a Presidential income tax return, the Secretary
shall disclose and make publicly available an initial report
regarding the examination with respect to such return. Such
report shall include--
``(A) the name of the taxpayer,
``(B) an identification of the subparagraph of subsection
(c)(1) which describes such return,
``(C) the date that such return was filed, and
``(D) the date on which the examination with respect to
such return commenced (or, if such examination has not
commenced as of the date of such report, a detailed
description of the reasons that such examination has not
commenced).
``(2) Periodic reports.--Not later than 180 days after the
disclosure of the report described in paragraph (1) with
respect to any
[[Page H9991]]
Presidential income tax return and not later than 180 days
after the most recent disclosure of a report described in
this paragraph with respect to such return, the Secretary
shall disclose and make publicly available a periodic report
regarding the examination with respect to such return. Such
report shall include--
``(A) the information described in subparagraphs (A)
through (D) of paragraph (1),
``(B) a description of the status of the examination,
including a description of the portions of the examination
which have been completed, which are in process, and which
are anticipated to take place, and
``(C) an estimate of the time frame for the completion of
the examination, including an identification of factors which
could alter such time frame, reasonable estimates of the
likelihood of such factors (taking into account the specific
facts and circumstances of the examination), and the likely
specific effects of such factors on such time frame.
Notwithstanding the preceding sentence, a periodic report
shall not be required under this paragraph with respect to
any return after the date on which a final report is
disclosed under paragraph (3) with respect to such return.
``(3) Final report.--Not later than 90 days after the
completion of the examination described in subsection (a)
with respect to any Presidential income tax return, the
Secretary shall disclose and make publicly available a final
report regarding such examination. Such report shall
include--
``(A) the information described in subparagraphs (A)
through (C) of paragraph (1),
``(B) the date on which the examination with respect to
such return was completed,
``(C) a list of the audit materials (as defined in section
6103(q)(2)) with respect to such examination, and
``(D) a description (including the amount) of each proposed
adjustment, adjustment, and controversy with respect to such
examination together with a description of how such proposed
adjustment or controversy was resolved (or a statement that
such proposed adjustment or controversy was not resolved, as
the case may be).
For purposes of this paragraph, an examination shall be
treated as complete on the date that the Secretary provides
the taxpayer with a notice of deficiency, or any closing
document referred to in section 6103(q)(2)(A)(v), with
respect to such examination.
``(4) Extension of due date report.--If a request is made
for an extension of the due date for filing any Presidential
income tax return, the Secretary shall, not later than 90
days after such request is granted or denied, disclose and
make publicly available an extension of due date report with
respect to return. Such report shall include--
``(A) the information described in subparagraphs (A) and
(B) of paragraph (1),
``(B) a statement that an extension of the due date for the
filing of such return has been requested,
``(C) the date that such request was received,
``(D) a statement of whether such request has been granted
or denied, and
``(E) the due date of such return (including any
extensions).
``(5) Treatment of failure to file.--In the case of a
failure to file a Presidential income tax return before the
close of the 60-day period beginning with the date prescribed
for filing of such return--
``(A) the Secretary shall conduct the examination described
in subsection (a) with respect to the taxable year covered by
the return to which such failure relates,
``(B) reports made pursuant to this paragraph shall include
a statement that such report is with respect to a return
which the taxpayer failed to file, and
``(C) this section and section 6103(q) shall otherwise
apply to such failure in the same manner as if a return were
filed at the close of such period.
The application of this paragraph with respect to any failure
to file a Presidential income tax return shall not prevent
the application of this section with respect to such return
at such time as such return may be filed.
``(6) Public availability.--For purposes of this
subsection, a document shall not be treated as having been
made publicly available unless made available on the
internet.
``(c) Presidential Income Tax Return.--For purposes of this
section--
``(1) In general.--The term `Presidential income tax
return' means any relevant income tax return of--
``(A) a President,
``(B) an individual who is married (within the meaning of
section 7703(a)) to a President for the taxable year to which
such return relates,
``(C) any corporation or partnership which is controlled by
any individual described in subparagraph (A) or (B) at any
time during the taxable year to which such return relates,
``(D) the estate of any person described in (A) or (B) or
any estate with respect to which any person described in
subparagraph (A), (B), or (C) is an executor, or beneficiary
at any time during the taxable year to which such return
relates, and
``(E) any trust with respect to which any person described
in subparagraph (A), (B), (C), or (D) is a grantor, fiduciary
or beneficiary, or for which another trust described in this
subparagraph is a grantor or beneficiary, at any time during
the taxable year to which such return relates.
Such term shall include any schedule, attachment, or other
document filed with such return.
``(2) Relevant income tax return.--The term `relevant
income tax return' means, with respect to a President, any
income tax return if--
``(A) any portion of the taxable year to which such return
relates is during the period that such President is the
President,
``(B) the due date for such return (including any
extensions) is during such period, or
``(C) such return is filed during such period.
``(3) Control.--For purposes of paragraph (1)(C)--
``(A) In general.--Except as otherwise provided in this
paragraph, control shall be determined under the rules of
paragraphs (2) and (3) of section 6038(e) (determined without
regard to subparagraphs (A) and (B) of such paragraph (2) and
without regard to subparagraph (C) of paragraph (3) thereof).
``(B) Restriction on family attribution.--
``(i) In general.--Except as provided in clause (ii), for
purposes of applying subparagraph (A)--
``(I) section 318 shall applied without regard to
subsection (a)(1)(A)(ii) thereof, and
``(II) section 267(c) shall applied by treating the family
of an individual as including only such individual's spouse
(in lieu of the application of paragraph (4) thereof).
``(ii) Exception for recent transfer to family members.--
For purposes of determining whether any corporation or
partnership is controlled by a President under paragraph
(1)(C) for any taxable year, clause (i) shall not apply if
such corporation or partnership was controlled by such
President (after application of clause (i)) at any time
during the 4 immediately preceding taxable years.
``(d) Application to Amended Returns.--For purposes of this
section and section 6103(q), any amendment or supplement to a
return of tax shall be treated as a separate return of tax
and the determination of when such amendment or supplement is
filed, and whether such amendment or supplement is a relevant
income tax return, shall be made without regard to the
underlying return.''.
(b) Disclosure.--Section 6103 of such Code is amended by
redesignating subsection (q) as subsection (r) and by
inserting after subsection (p) the following new subsection:
``(q) Disclosure With Respect to Presidential Income Tax
Returns.--
``(1) In general.--The Secretary shall disclose and make
publicly available (within the meaning of section 7613(b))--
``(A) each Presidential income tax return (as defined in
section 7613(c)),
``(B) each report described in section 7613(b), and
``(C) any audit materials with respect a return described
in subparagraph (A).
``(2) Audit materials.--The term `audit materials' means,
with respect to any return:
``(A) Any of the following which are provided by the
Secretary to the taxpayer (or any designee of the taxpayer):
``(i) Any written communication which identifies such
return as being subject to examination.
``(ii) Any written communication which proposes the
adjustment of any item on such return, any report by an
examiner related to such proposed adjustment, and any
supervisory approval of any penalty proposed as part of such
adjustment.
``(iii) Any memorandum or report of the Internal Revenue
Service Independent Office of Appeals with respect to such
return, and any denial of any request described in
subparagraph (B).
``(iv) Any notice of deficiency with respect to such
return.
``(v) Any closing documents with respect to the examination
of such return, including any closing agreement or no change
letter.
``(B) Any request for referral to the Internal Revenue
Service Independent Office of Appeals of any controversy with
respect to such return.
``(C) Any petition filed with the Tax Court for a
redetermination of any deficiency referred to in subparagraph
(A)(iv).
``(3) Exception for certain identity information.--The
information disclosed and made publicly available under
paragraph (1) shall not include any identification number of
any person (including any social security number), any
financial account number, the name of any individual who has
not attained age 18 (as of the close of the taxable year to
which the return relates), the name of any employee of the
Department of the Treasury, or any address (other than the
city and State in which such address is located).
``(4) Timing of disclosures.--Any information required to
be disclosed under paragraph (1) shall be disclosed and made
publicly available not later than--
``(A) in the case of any income tax return referred to in
paragraph (1)(A), 90 days after the date that such return is
filed,
``(B) in the case of any report referred to in paragraph
(1)(B), the deadline specified in section 7613(b) for
disclosing such report, and
``(C) in the case of the audit materials referred to in
paragraph (1)(C), 90 days after the completion of the
examination (within the meaning of section 7613(b)(3)) with
respect to the return to which such audit materials
relate.''.
[[Page H9992]]
(c) Clerical Amendment.--Subchapter A of chapter 78 of such
Code is amended by redesignating the item relating to section
7613 as an item relating to section 7614 and by inserting
after the item relating to section 7612 the following new
item:
``Sec. 7613. Examination with respect to Presidential income tax
returns.''.
(d) Effective Date.--The amendments made by this subsection
shall apply to returns, amendments, and supplements filed
(and failures to file returns which occur) after the date of
the enactment of this Act (and to reports and audit materials
with respect to such returns, amendments, supplements, and
failures).
The SPEAKER pro tempore. The bill shall be debatable for 1 hour,
equally divided and controlled by the chair and ranking minority member
of the Committee on Ways and Means or their respective designees.
The gentleman from Massachusetts (Mr. Neal) and the gentleman from
Texas (Mr. Brady) each will control 30 minutes.
The Chair recognizes the gentleman from Massachusetts.
General Leave
Mr. NEAL. Madam Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on the bill that is under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. NEAL. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, let me quickly lend my voice to having witnessed a
superb legislator, Mr. Hoyer, over a long career, and that is exactly
what the gentleman was and is: a superb legislator.
Madam Speaker, we are here this morning to affirm that, in America,
we are a Nation of equal citizens. No person is above the law.
By doing that, we honor the acknowledgment of congressional oversight
and responsibility. Congress has a responsibility that dates to Magna
Carta, and I am prepared to go back to the Battle of Hastings, if
necessary, in 1066 to make the argument that I have just offered.
The Ways and Means Committee is entrusted with the oversight of our
revenue system. The Ways and Means Committee and staff members all
honor that very profound tradition.
At the root of it all this morning is our Federal tax system that
funds the democracy that we all love and cherish. We rely on voluntary
tax compliance from all Americans and perhaps especially the President,
who always should model the highest order of compliance.
On December 13, 49 years ago this month, President Richard Nixon
asked the Ways and Means Committee chairman through a letter to have
the Joint Committee on Taxation review his tax returns.
Let me say something about the Joint Committee on Taxation. Both
political parties hold the JCT in the highest personal and professional
esteem.
This examination established the precedent for congressional
oversight of Presidential tax compliance.
{time} 0945
Four years ago, our committee began reviewing the mandatory audit of
Presidential tax returns to see how the IRS was handling the stress of
a President with complex finances.
The committee expected to find that mandatory examinations were
conducted promptly and that more staff had been dedicated to the
program to meet the more rigorous demands. I would remind all that this
morning's New York Times--that I read online last evening--highlights
the fact that Barack Obama and Joe Biden both had their tax forms
reviewed.
Instead, after years of stonewalling and litigation that ended at the
Supreme Court, four Federal court decisions from three courts, our
committee found that for all practical purposes the mandatory audit
program was dormant. It wasn't just functioning poorly; it wasn't
functioning at all. In fact, the IRS did not start its mandatory audits
until receiving a letter that I sent requesting a President's tax
forms.
The IRS has failed to administer its own mandatory audit program
policies, so the best available recourse is for Congress to fill this
void with legislation that eliminates the IRS's discretion in the
matter. That is precisely what we are asking of this institution this
morning. I can't imagine that anybody, given the controversy of recent
days, would be opposed to legislation.
We would require the IRS to publish the President's tax returns,
audit them in a timely manner, and keep the American public updated on
the results because the President is not an ordinary taxpayer.
A reminder, our legislation is about the Presidency, not about a
President.
No other American holds this power, or influence, as the leader of
our executive branch.
We arrived at this legislation through a deliberate and cautious
process, as always. These improved guardrails will provide Americans
the assurance they deserve that our tax code applies evenly and fairly
to all of us, no matter how powerful.
The Ways and Means Committee oversight staff pursued the facts about
mandatory examination procedures with professionalism and diligence.
They did a great job. I emphasize that there were no leaks by the
committee leading up to this decision to release our report on the
mandatory examination process. Imagine that, in Washington for
something this complex, no leaks.
We adhered carefully and scrupulously to the law and resisted
entreaties from the fringe of both political parties as we proceeded
with great patience and deliberation. No leaks as to how we were to
move forward.
This bill, combined with investments in the IRS that we made as part
of the Inflation Reduction Act, will preserve the integrity of the
Presidency and our system of tax and ensure that no one in the country
is above the law.
Today's legislation, I repeat, is not about a President, it is about
the Presidency.
It is not about being punitive or malicious. And for those on the
other side and those who are witnesses here today, they have worked
with me for a long time, and they know what I just said is entirely
accurate.
The bill we consider today, once again, is about the integrity of the
Presidency and the integrity of our tax system.
Madam Speaker, finally, I include in the Record a technical
explanation of the bill prepared by the staff on the Joint Committee on
Taxation, which can be found at https://www.jct.gov/publications/2022/
jcx-20-22/
Mr. NEAL. Madam Speaker, I urge our colleagues to pass this
legislation, and for the moment, I reserve the balance of my time.
Mr. BRADY. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I thank Chairman Neal for his leadership of this
committee and his friendship. You care about the institution; you care
about this committee. Your word has always been good, and together our
committees have done good things: banning surprise medical billing, new
trade agreements with Mexico and Canada, repeated efforts to help
people save. It has been an honor to serve with you.
Now, if you will excuse me, I intend to peel the bark off this bill
in front of us right now.
Madam Speaker, this bill is a charade. It is a flimsy excuse that for
years has been used to justify the political targeting of former
President Trump.
This week, Democrats in Congress finally accomplished their goal: for
the first time in history making public the full, actual tax returns of
a private citizen. This unprecedented action jeopardizes the right of
every American to be protected from political targeting by Congress.
We are told President Trump's returns must be released in order for
the IRS to conduct its Presidential audits. That is absurd. That is
like going to the doctor and being told your private medical records
must be released in order to be examined. One has nothing to do with
the other. And then you would quickly realize, someone just wants to
release your medical records, and any excuse will do.
Let me be clear: Republicans' concerns are not whether the President
should have made his tax returns public as has been tradition, nor
about the accuracy of his tax returns, that is for the IRS and the
taxpayer to determine.
Our concern is that this politically motivated action sets a terrible
precedent that unleashes a dangerous new
[[Page H9993]]
political weapon reaching far beyond any President, and overturns
decades of privacy protections for average Americans that have existed
since the Watergate reforms.
Our current law was put in place specifically to prevent Presidents
and Members of Congress from targeting political enemies through their
tax returns. Unfortunately, the Supreme Court chose not to intervene to
stop the flimsy and admittedly partisan Democrat efforts to target the
former President.
Now, as a result, thanks to this week's actions, longstanding privacy
protections for all taxpayers have been gutted.
Going forward, the majority chairman of the House Ways and Means
Committee and the Senate Financial Committee will have nearly unlimited
power to target and make public the tax returns of private citizens,
political enemies, business and labor leaders, or even the Supreme
Court Justices themselves.
No party in Congress should hold that power. No individual should
hold that power to embarrass, harass, or destroy a private citizen
through disclosure of their private tax returns.
After nearly half a century, the political enemies list is back in
Washington, D.C., and it will unleash a cycle of political retribution
in Congress.
Many of us in Congress believed the current law was strong enough to
protect private citizens against this political targeting, but it is no
longer. That is frightening.
Republicans will continue to fight to protect American taxpayers from
this abuse of power that will surely have severe consequences for
taxpayers and democracy for years to come.
We have urged our Democrat friends to turn back because making
private tax information public will be a regrettable stain, both on our
committee and on Congress. It will make American politics even more
ugly and divisive. In the long run, we believe every Member of Congress
will come to regret this.
Madam Speaker, we strongly oppose this bill today. Not because
portions of it doesn't have merit, some do, but it has serious flaws,
of course, because it didn't exist 48 hours ago.
And had it been brought forward 4 years ago, 3 years ago, 2 years
ago, as an honest attempt to improve Presidential audits, I am
convinced we could have found common ground with no need to expose
private tax returns of anyone. But not now, not this bill, and not this
way.
Republicans will not support any measure whose only purpose is to
provide cover for the political targeting of a private citizen.
Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I still intend to say kind things about the
ranking member despite peeling the bark off my legislation.
Madam Speaker, I yield 1 minute to the gentleman from Michigan (Mr.
Kildee), a leader on this issue of tax compliance.
Mr. KILDEE. Madam Speaker, I rise in support of this legislation, the
Presidential Tax Filings and Audit Transparency Act, legislation that
ensures that we protect our tax system and ensures that it is fair and
transparent for all Americans.
As we have heard, the purpose of the Ways and Means Committee
investigation and the purpose of this legislation is to ensure that no
American is above the law, even the President of the United States.
But shockingly, under the former President, the IRS was not examining
the President's tax returns as required by their own policy as it had
for other Presidents before and since. It did not follow its own rules.
Because of this, there are still glaring questions about whether the
former President was abiding by our tax laws.
That is why we needed the information, and that is why we need this
legislation to require the IRS to examine Presidential returns in a
timely and complete manner. The American people must have confidence
that our tax laws apply evenly and justly to everyone.
Madam Speaker, I thank Chairman Neal for his leadership on this. In
passing this, we will ensure integrity in our tax system.
Mr. BRADY. Madam Speaker, I include in the Record an article from
yesterday's Los Angeles Times confirming the release of tax returns
does nothing to evaluate the IRS auditing process or to advance any
legitimate oversight goal.
[From the Los Angeles Times, Dec. 21, 2022]
Column: Should Congress Post Trump's Tax Returns Publicly? I Don't
Think So
(By Nicholas Goldberg)
Donald Trump should have released his tax returns when he
was running for president, and in not doing so he was
deceptive, sleazy and in violation of a long-standing
tradition that fosters transparency and honesty. He obviously
hoped to hide unfavorable information from the voters.
Despite that, I don't believe the House Ways and Means
Committee should release his tax returns to the public now.
The committee fought a long battle all the way to the
Supreme Court to obtain copies of the returns. It argued that
it needed them to evaluate the effectiveness of an IRS
program that audits the tax filings of presidents.
Republicans squawked all the way, saying the Democrats who
controlled the committee were being disingenuous, and that
no, no, no, they weren't seeking to do a legitimate
evaluation--they were just creating a pretext to get ahold of
Trump's returns for a humiliating public fishing expedition
into what taxes had or hadn't been paid.
The courts ultimately ruled that the committee could have
six years of Trump's federal tax returns. That battle ended
last month.
But on Tuesday, the committee voted to do something that
goes well beyond what's necessary to evaluate the IRS'
presidential audit program: The committee is now going to
release Trump's taxes publicly, posting the full returns
(minus certain identifiers like Social Security numbers and
bank account numbers) for all to see. And quickly too, in the
coming days, before the Democrats lose control of the
committee to the Republicans on Jan. 3.
Why make the returns public? How does that help Congress
figure out whether the IRS auditing process is working? How
does it further the legitimate oversight goals of the
committee?
Answer: It doesn't. It turns out the Republicans are right.
(This may be the first time since the Civil War.) As they
correctly noted, this is a politically motivated move to
release information that might harm or embarrass the former
president.
In theory, I'm all for embarrassing Trump. (With these two
caveats: First, no one can embarrass Trump more than he
embarrasses himself, and second, he's entirely shameless so
he doesn't really get embarrassed in any normal sense of the
word.) The ex-president is a dishonest thug who needs to be
called to account for his misbehavior.
But in this particular case, I think the Democrats are in
the wrong. For one thing, releasing the private tax returns
probably won't shed much light on anything. The New York
Times already received leaked details of more than two
decades of Trump's tax filings and published long stories
that should've shocked the world. Billionaire pays less in
federal taxes in some years than you and I do! Trump paid no
federal income taxes at all in 10 out of 15 years!
Furthermore, the Manhattan district attorney's office has
many of Trump's tax returns as well, and prosecutors can
pursue cases using the data they uncover.
But the main reason I object to posting the returns is that
I worry--perhaps quaintly, in this day and age--about the
continued politicization of governmental processes, and the
continued breaking of established norms, in this case making
private tax filings public. I know I'll get a thousand emails
saying ``the Republicans wouldn't hesitate to do the same to
us'' and ``if we're civil and respectful and always play by
Marquess of Queensberry rules while our political opponents
continue their underhanded tricks, we will always be
beaten.''
There's certainly some truth to that. But there's truth to
the flip side too: If nobody plays by the rules, there will
soon be no rules to play by. When you're doing something as
sensitive and politically explosive as investigating a former
president--at a tense time in history when there's talk of
civil war and violence is on the rise and bitter political
partisanship is smoldering--it makes sense to be careful to
respect the established process, be as honest as possible,
refrain from unnecessary politicization and not escalate
conflict unnecessarily.
Among other things, posting Trump's taxes seems likely to
result in tit-for-tat posting of other people's private tax
returns. Will we soon be seeing Hunter Biden's tax returns on
the web?
It'll also give Republicans some basis for saying that,
actually, it is Democrats who go low when others go high.
Unsurprisingly, the committee vote was along party lines.
Like so much of what goes on in Washington these days.
If Congress thinks all presidents or presidential
candidates should release their tax returns for public
scrutiny--which I believe is a good idea--it should pass a
law that mandates that going forward. It should not find
circuitous, pretextual ways of going after particular
presidents.
The returns the Ways and Means Committee received
apparently showed that Trump often paid little or nothing in
federal income taxes between 2015 and 2020 despite reporting
millions in earnings, thanks to
[[Page H9994]]
steep losses elsewhere. That's similar to what the New York
Times found in its reporting.
The unembarrassable Trump once said in a debate when
Hillary Clinton accused him of not paying much in federal
taxes: ``That makes me smart.''
Voters need to know more about the sources and scope of
presidential candidates' wealth and about potential conflicts
of interests.
But posting Trump's returns at this point and under these
circumstances and given the arguments that were made to
obtain them, serves politics much more than transparency.
Mr. BRADY. Madam Speaker, I yield 2 minutes to the gentleman from
Nebraska (Mr. Smith).
Mr. SMITH of Nebraska. Madam Speaker, if I might, I thank the
gentleman for yielding me time. This is probably his last time managing
a bill, and I thank him for his dedication and diligence as ranking
member.
Madam Speaker, I rise today in strong opposition to this bill. I
think it is one of the most unnecessarily divisive efforts in modern
history. It has been rushed to the floor with no notice, no hearing, no
markup, and certainly no opportunity to amend it.
We are only here as an excuse for Democrats' last-minute rush to
weaponize private taxpayer information against their opponents. Much of
the oversight of the Presidential audit program Democrats claim to have
been seeking could have been conducted without accessing or releasing
anyone's confidential tax information.
The Inspector General and the Joint Committee on Taxation could have
provided an analysis of the start and completion dates of Presidential
audits without Democrats obtaining or releasing confidential tax
information.
The JCT could have provided us an analysis of the efficacy of
Presidential audits without Democrats obtaining or releasing the
private tax returns.
Instead, we are debating a bill which will never be considered in the
Senate or become law, but solely to paper over the bad decision that
Democrats made only two nights ago.
Let's defeat this bill today and start over in January with a
bipartisan effort to ensure the Presidential audit program is working
as intended, making sure the President and his family are following the
law, without rushing to cancel anyone's 6103 protections.
Mr. NEAL. Madam Speaker, a reminder, 9 out of the last 10 Presidents
of the United States have publicly offered their tax forms.
Madam Speaker, I yield 1 minute to the gentleman from Illinois (Mr.
Danny K. Davis), one of the leaders on this issue.
Mr. DANNY K. DAVIS of Illinois. Madam Speaker, I thank the chairman
for putting this bill together.
We live in a country that is governed by a Constitution, laws, rules,
and regulations. There are no exemptions, there are no people who could
be let off because of a position that they hold.
Tradition has it that we have seen the public is desirous of
information. They want to know, and I think it is our responsibility to
make sure that they do.
Madam Speaker, I strongly support this legislation.
Mr. BRADY. Madam Speaker, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Kelly), the Republican leader of the Select Revenue
Measures Subcommittee.
Mr. KELLY of Pennsylvania. Madam Speaker, this phrase keeps coming up
that no person is above the law. That is true. But, also, no person is
denied protection under the law.
Why would we wait 4 years?
Why would this come up at this time that we have to check the former
President of the United States' tax returns?
The answer is because we want to make them public.
Why do we want to make them public?
Because we need to have every single citizen understand just who this
person is and what is in their tax returns with no regard to the
protections that are already in place that these kinds of things don't
happen, that they do not become a political weapon.
Yet, now in the very last days of this session, we have decided that
this is the most important thing this Congress can do. No other
President has ever gone through this type of scrutiny.
{time} 1000
We keep saying he is not above the law. He is not above the law. The
truth of it all is, he is not protected by the law because we are going
to change the law. We are going to make it a weapon that we can go
after.
I will just tell you this: The American people continue to lose
faith, trust, and confidence in a system that cherry-picks what it
decides to go after and go after in a way that is detrimental to the
very form of government that we have.
To be here today, talking about this, in the last hours of this
session, has nothing to do with what is good for the American people.
It is a political hit job. It is sad and, especially in this age, for
the Ways and Means to be doing this at the end of the year? Horrible.
Mr. NEAL. Madam Speaker, we were not granted this information until
the Supreme Court ruled on November 23, and we did not pursue this
legislation at the last minute. We went through the regular order here,
indeed, with the gentlewoman from California, who did a great job on
this. She represented the committee at the Rules Committee session
yesterday.
Madam Speaker, I yield 1 minute to the gentlewoman from California
(Ms. Chu).
Ms. CHU. Madam Speaker, I rise today in strong support of H.R. 9640,
the Presidential Tax Filings and Audit Transparency Act of 2022.
This week, I was shocked to find that the IRS did not comply with its
own mandate to conduct annual audits of the President's tax returns.
This mandatory Presidential audit has been in place since 1977. Yet,
during Trump's 4 years in office, only one mandatory audit was even
started and none of the audits were completed. The majority of audits
weren't even started until Trump left office.
The American people deserve transparency and checks and balances for
the President, the most powerful person in the world. The bill before
us would ensure the integrity of this audit in Federal statute and show
the American public that no one is above the law. I urge my colleagues
to vote ``yes.''
Mr. BRADY. Madam Speaker, I include in the Record one page from the
Democrats' own report showing that, contrary to what we just heard,
every single year, tax returns at issue are under audit, debunking this
claim that the IRS hasn't examined the tax return.
Notably, the IRS sent a letter to the former President
notifying him that his tax year 2015 return was selected for
examination on April 3, 2019, which is the date the Chairman
sent the initial request to the IRS for the former
President's return information and related tax returns.
The designated agents were told by the IRS that two of the
entities the Chairman requested were included in the
mandatory audit program--DJT Holdings LLC and DJT Holdings
Managing Member LLC (DJTH Managing Member). The designated
agents found the below information regarding DJT Holdings
LLC's date of filing on the transcripts and selection for
examination and very little information for DJTH Managing
Member.
Tax Year, Date Return Filed, Date Selected for
Examination, Designated by IRS as Mandatory Audit:
2015, October 10, 2016, July 25, 2019, No.
2016, October 16, 2017, February 11, 2020, No indication.
2017, October 8, 2018, March 19, 2021, No.
2018, October 21, 2019, January 28, 2022, No.
2019, October 12, 2020, April 5, 2022, No.
2020, February 21, 2022, None, No.
During the prior Administration, it was clear that the
mandatory audit program was not a priority and was not
provided with the resources needed to ensure compliance by
the former President. An internal IRS memo stated: ``With
over 400 flow-thru returns reported on the Form 1040, it is
not possible to obtain the resources available to examine all
potential issues.'' The designated agents found that the
following issues, among others, warranted examination by the
IRS:
Charitable contributions--whether the 2015 conservation
easement deduction of $21 million and other large donations
reported on the Schedule A were supported by required
substantiation.
Verification of Net Operating Loss Carryover Schedule--
whether the amount of net operating loss carryover in 2015 of
$105,157,825 and future years was proper.
Unreimbursed partnership/S corporation expenses--whether
the terms of the partnership agreements supported
unreimbursed expense deductions totaling $27 million over six
years.
Related party loans--whether loans made to the former
President's children are loans or disguised gifts that could
trigger gift tax.
Cost of goods sold deductions by DJT Holdings--whether
these deductions of about
[[Page H9995]]
$126.5 million over five years is appropriate when it is not
clear what DJT Holdings is selling from the face of the
return.
LFB Acquisition LLC--whether there is any support for
changes in the management fees and general and administrative
expenses of LFB Acquisition that were significantly higher in
2017 ($1.9 million and $2.8 million, respectively) than 2016
($750,000 and $549,000, respectively) and 2018 ($707,000 and
$570,000, respectively).
Mr. BRADY. Madam Speaker, I yield 5 minutes to the gentleman from
Missouri (Mr. Smith), the Republican leader of the Budget Committee.
Mr. SMITH of Missouri. Madam Speaker, we are 12 days, 12 days until
the Democrat majority does not exist. In 13 days, the Republican
majority will be in charge.
Americans are facing the highest spike in prices in 40 years because
of the one-party Democrat rule in Washington, because of their reckless
spending.
The Ways and Means Committee is the committee that affects the
economy more than any committee in all of Congress. What do the House
Democrats feel like their last 12 days, their biggest priority is not
solving issues affecting working-class Americans, but issues targeting
their main political opponents.
This legislation is only cover for what they have been campaigning on
for years, and that is, to get Trump's tax returns.
Let me tell you, if you don't believe me now, this is called the
mandatory audit program. It is about auditing all current and former
Presidents to make sure their tax returns are audited. But the chairman
of this committee only requested how the mandatory audit program has
worked for one President, one, and it was a Republican President. His
name was Donald Trump.
I asked, on Tuesday, did you request a mandatory audit review process
on Joe Biden? No.
Did you request one on Obama? No. Clinton? No. Bush? No. Carter? No.
But yes, only Trump.
This is a cover for their political objective, and that is to target
their political opponents.
We have heard over and over that no one is above the law; that
includes everyone in this Chamber.
On Tuesday, when we sat in this markup, I raised the point, how can
you release the full tax returns, with all of the private personal
information of the private citizens, their Social Security number,
children's Social Security numbers? And I said, we need an amendment to
redact that information. I was told, we are not going to vote on
amendments.
But everyone says that no one is above the law. We were told good
faith, good faith, would redact the full transcripts, and it would be
decided by the majority staff.
Has the minority staff been able to participate in it? No. We don't
even know what the final documents of the tax returns that are going to
be released, what they are going to look at.
This was another example where you had to pass something before you
know what is in it. That is what Pelosi has done this entire Congress.
That is exactly what the Ways and Means Democrats did. They have
charted a new territory for the Ways and Means Committee.
It is the oldest committee in Congress. It is supposed to be the most
bipartisan committee in Congress. But they ignited a new political
tool, that future Congresses will now utilize.
I have traveled all over the country, 42 States just this year alone,
and one thing that constantly kept coming up to me is, Congressman,
look into President Biden's family and how they have been enriched by
his position.
In fact, banks have flagged over 150 red flags to Treasury. These are
suspicious activity reports. Usually, it is because they believe there
is fraud or money laundering, and this is the Biden family bank
accounts.
What about the fact that foreign governments are paying to have their
principals in the same room as Joe Biden? Or the sale of U.S. natural
gas to China, of which the Bidens held a 10 percent equity stake, or
business plans to sell one of the largest sources of cobalt for
electric vehicles to China, and $11 million made from Hunter Biden's
``work'' with a Ukraine firm and a Chinese businessman.
Like I said, over 150 red flags or suspicious activity reports filed
by banks.
The SPEAKER pro tempore. The time of the gentleman has expired.
Members are reminded to refrain from engaging in personalities toward
the President.
Mr. NEAL. Madam Speaker, I did indicate, I think, perhaps earlier--
maybe the gentleman was not here--that Mr. Obama and Mr. Biden both
have had their tax forms audited. The majority staff has offered the
minority staff, who I have great regard for, the opportunity to
participate in the redaction process. They chose not to.
Madam Speaker, I yield 1 minute to the gentleman from Pennsylvania
(Mr. Evans), another leader on the issue of tax compliance.
Mr. EVANS. Madam Speaker, I rise today to strongly support this
legislation.
I am proud to serve on the Ways and Means Committee which, under the
chairman's strong leadership, oversees and protects our Nation's tax
code. Tax fairness is a top priority for me and the Democratic members
of the Ways and Means Committee.
The chairman's legislation sends a real message of fairness,
something we haven't seen before. I encourage all my colleagues to
support this legislation.
Mr. BRADY. Madam Speaker, I would note that our professional staff
was ready to join in redaction; however, we were forced to prepare for
this floor action and offered to do that together after we were done
this morning.
Madam Speaker, I include in the Record a recent legal journal that
notes that because Ways and Means Democrats did not pursue the
Presidential audits of any of the other eight Presidents in that
system, that the committee undermines their own credibility by
releasing returns outside the context of a comprehensive review, an
honest review of the Presidential audit program.
[From Chicago-Kent Law Review, April 1999]
I.R.C. 6103: Let's Get to the Source of the Problem
(By Mark Berggren)
INTRODUCTION
Each year, millions of taxpayers in the United States
voluntarily disclose the most intimate details of their
private lives to the Internal Revenue Service (``IRS''). A
government official can glean, among other things, a
taxpayer's name, social security number, marital status,
income, and religious and political affiliations from a tax
return's attachments and completed schedules. Despite the
plethora of private information supplied to the IRS, prior to
the enactment of the Tax Reform Act of 1976, Internal Revenue
Code (``I.R.C.'') Sec. 6103 stated that a taxpayer's tax
return was a ``public record'' and as such was ``open to
inspection only upon order of the President and under rules
and regulations prescribed by the Secretary or his delegate
and approved by the President.''
The lack of protection afforded to returns and return
information resulted in the widespread misuse of what
taxpayers believed was confidential information. These abuses
took the forms of the unauthorized use of tax information for
political purposes by presidential administrations and the
authorized use of tax information by governmental agencies
other than the IRS. However, it was not until the Watergate
scandal that these governmental abuses were thrust into the
public limelight. The Watergate investigation led to
allegations that President Nixon had used return information
for unauthorized purposes and sought to use IRS audits and
investigations for political purposes.
In response to these misuses of tax information and their
potential effect on the voluntary assessment system, Congress
amended I.R.C. Sec. 6103. The amended version of Sec. 6103
states that return and return information (``tax
information'') shall be confidential and shall not be
disclosed except in thirteen specific circumstances.
Violations of this prohibition may result in criminal
sanctions under Sec. 7213 and civil sanctions under
Sec. 7431.
These necessary amendments, however, have not silenced the
controversy surrounding Sec. 6103. Section 6103's thirteen
exceptions do not contain an exception for tax information
that is part of a public record. This omission forced several
of the Federal Courts of Appeal to consider the question of
whether an authorized disclosure of tax information that
subsequently becomes part of a public record loses its
Sec. 6103 protection. In order to resolve this question, the
Federal Courts of Appeal have adopted different approaches to
the problem. The Sixth and Ninth Circuits look to see if the
disclosed tax information has lost its confidentiality. Based
on this analysis, these circuits reason that tax information
that is part of a public record is no longer confidential
and, thus, loses its Sec. 6103 protection. In contrast to
this approach, the Fourth and Tenth Circuits look at the
literal language of Sec. 6103. Because Sec. 6103 has no
public records exception to its nondisclosure norm, these
circuits conclude that tax information in a public record is
still protected by Sec. 6103 and any subsequent disclosures
of that information violate Sec. 6103. Not to be outdone, the
Seventh and Fifth
[[Page H9996]]
Circuits have also considered the issue. These circuits focus
on the source of the information disclosed. If the disclosure
is taken directly from a public record, the disclosure does
not contain tax information as statutorily defined and
Sec. 6103 is not violated. However, if the disclosure comes
directly from tax information, then Sec. 6103 is violated
regardless of whether the disclosure is also part of a public
record.
The resolution of this issue has far-reaching implications
if one considers the answer's potential effect on taxpayer
compliance. If courts create judicial exceptions to
Sec. 6103, taxpayers may not comply with tax laws because
their tax information will not be protected from governmental
abuse. On the other hand, if the IRS is prevented from
publicizing any tax information taken from any source, it may
be unable to deter noncompliance. The legislative history of
Sec. 6103 indicates that Congress was aware of these concerns
and sought to balance them in Sec. 6103 in order to maximize
taxpayer compliance. However, both Sec. 6103 and its
legislative history are silent as to whether tax information
that is part of a public record loses its Sec. 6103
protection. Thus, a uniform interpretation of Sec. 6103 is
needed not simply for uniformity's sake, but for the effect
on taxpayer compliance.
This note explores each circuit's approach to the public
records problem and its possible effect on taxpayer
compliance. Part I provides the history of Sec. 6103 with an
emphasis on the legislative purpose behind the 1976
amendments to Sec. 6103. Part II outlines the split in the
circuits according to the three approaches the circuits have
taken: the confidentiality approach, the disclosure approach,
and the source approach. Because the Fifth Circuit's recent
decision is the most comprehensive analysis of the public
record disclosure dilemma to date, this note discusses its
opinion in detail. In Part III, the note critiques each
approach in light of the legislative and political history
behind Sec. 6103. It concludes that the ``source'' approach
of the Seventh and Fifth Circuits is the best approach
because it effectuates the purpose behind Sec. 6103 without
imposing a judicially created exception on Sec. 6103.
Mr. BRADY. Madam Speaker, I yield 3 minutes to the gentleman from
Kansas (Mr. Estes).
MR. ESTES. Madam Speaker, I thank my friend from Texas for yielding.
Madam Speaker, what a shameful way for the majority to end their
reckless tenure in House leadership.
Today, we are debating and voting on rushed bills that will cost
Americans trillions of dollars, expand the Federal government, and
eviscerate personal privacy.
The timing of this atrocious bill is an assault on the institution
and further undermines the public trust in the United States House of
Representatives and Federal agencies.
Let us be clear: This bill has one purpose, to help the majority
party justify their prejudiced release of personal and private data of
the former President, his wife, and his 16-year-old son.
The supporters of this bill claim that releasing personal tax returns
is needed to prove the Presidential mandatory audit process works. It
does not.
Congress should oversee the Presidential mandatory audit process to
ensure it does work correctly; but this invasion of privacy does not do
that.
Another point, the Presidential mandatory audit process is completely
separate from the voluntary release of tax returns done by seven of the
last nine Presidents.
Democrats have supercharged the IRS weapon to not only go after
political enemies, but their spouses and minor children, too. Minor
children aren't even exempt from the Democrats' desire to take down
their opponents.
Regardless of one's political preferences or attitudes toward a
former President, every American should be vehemently opposed to this
un-American attack on privacy, and I urge my colleagues to vote ``no.''
Mr. NEAL. Madam Speaker, the former Commissioner of the IRS has
indicated in the last 24 hours that he had no idea as to how the actual
audit of a President's forms played out. That is not from me; that is
from the public record.
Madam Speaker, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Panetta) who has had a profound interest in this issue.
Mr. PANETTA. Madam Speaker, let me start off by expressing my
gratitude for Chairman Neal, for his seriousness, his sincerity, and
his solemnity in his leadership in the Ways and Means Committee and in
the way he conducted this request and release of the former President's
tax returns and the writing of this legislation before us.
Because of him, throughout this odyssey, the members of the Ways and
Means Committee always knew and felt the gravity, the implications of
what it meant to release an individual's tax returns.
In fact, prior to this weekend, which was prior to my review of the
former President's tax returns, I admit, I had no intent on voting to
release them. However, that changed. That changed once we were able to
obtain the returns, based on a valid legislative purpose and confirmed
by the Supreme Court, go through the returns, and see the complete
failure of the IRS when it comes to their Presidential audit program, a
program that is absolutely necessary to ensure that the world's most
important public servant is abiding by the law, paying his or her taxes
like you and me, and free from any conflicts of interest.
But clearly, the IRS doesn't appreciate, nor does it prioritize the
importance of this program, especially during the last administration
because, as applied to the former President, not one audit was
completed, despite what the President said to the American public.
That is why I support this legislation, so that any President's
personal and business tax returns are audited and made public, and we
are aware of those returns that are audited.
I am proud to say that under the leadership and seriousness of
Chairman Neal, now Congress needs to do its job and pass H.R. 9640.
Mr. BRADY. Madam Speaker, I yield myself 20 seconds to note that
every year of President Trump's tax returns are under audit.
Madam Speaker, I include in the Record an article explaining the
purpose of the taxpayer privacy law the Democrats have dismantled this
week, exposing all Americans to political attack via tax information.
[From the Lawfare, Dec. 2, 2022]
House Democrats Can Release Trump's Tax Returns. But Should They?
(By Daniel J. Hemel)
Now that a House committee has obtained access to six years
of former President Trump's tax returns, congressional
Democrats face an easy question and a harder one.
The easy question is whether, as a matter of law, the House
Ways and Means Committee--which gained access to the former
president's tax filings after the Supreme Court dismissed
Trump's last-ditch bid to block the Internal Revenue Service
from handing over the documents--can make Trump's returns
public before Republicans take control of the chamber on Jan.
3. The answer to that question is straightforwardly yes.
The harder question is whether, as a normative matter, the
committee ought to make Trump's returns public in the waning
weeks of the Democratic majority.
On the one hand, Trump's tax filings should have seen the
light of day long ago. Trump should have released his returns
voluntarily--as every elected president since Richard Nixon
has. The Trump administration should have allowed the IRS to
hand the president's tax returns over to the House Ways and
Means Committee when that panel's chair, Rep. Richard Neal
(D-Mass.), requested those documents in April 2019. And the
federal judiciary shouldn't have allowed Trump to stall the
release of his returns for three and a half years through
litigation.
On the other hand, the Ways and Means Committee has
maintained throughout the litigation over Trump's tax
returns--which culminated with last week's Supreme Court
decision--that it is seeking the documents as part of its
plan to review the IRS's presidential audit program. (The
presidential audit program is the procedure--mentioned in an
IRS manual but not codified in any statute or regulation--by
which the IRS examines individual tax returns filed by the
president and vice president each year.) Any review of the
presidential audit program that starts now and ends when the
GOP takes control of the House in January would be slapdash
and superficial. If Democrats on the House Ways and Means
Committee rushed to release Trump's returns in the lameduck
session--without conducting the comprehensive review of the
presidential audit program that they promised--it would look
like their stated motive for seeking the documents was
indeed, as Trump has alleged, pretextual.
Fortunately, the Senate Finance Committee--which will
remain under Democratic leadership in the next Congress--has
both the resources and the apparent inclination to conduct
the comprehensive review of the presidential audit program
that House Democrats initially set out to undertake. So even
if the House Ways and Means Committee doesn't release Trump's
tax returns this month, the likely consequence is not that
Trump's returns will remain under wraps forever. The Senate
Finance Committee will be able to obtain the returns itself,
and that committee then can release return information that
is relevant to its review of the presidential audit program.
[[Page H9997]]
Full disclosure: I've been advocating for the release of
President Trump's tax information since April 2017, when I
suggested in a Washington Post op-ed and a Yale Law Journal
Forum article that New York could enact a law requiring the
release of Trump's state tax filings. I've advised state
lawmakers in New York on strategies to make Trump's tax
returns public. I've criticized House Ways and Means Chairman
Neal for acting too slowly to obtain Trump's returns. So I'm
no apologist for Trump's tax secrecy.
Still, it's important that Democrats on the House Ways and
Means Committee remain true to their word. Chairman Neal said
his committee needed Trump's tax returns to evaluate the
extent to which the IRS audits and enforces federal tax laws
against the president. To turn around now and release Trump's
returns--outside the context of a thorough evaluation of the
IRS's presidential audit program--would make the stated
rationale look much like a head fake. That would seem
especially gratuitous given that the Senate Finance Committee
stands ready, willing, and able to carry out its own review
of the presidential audit program.
The Easy Question: Can House Democrats Make Trump's Tax Returns Public?
The law is clear that the House Ways and Means Committee
can now make Trump's tax returns public if a majority of the
committee members vote to do so.
The relevant statute, Section 6103(f) of the Internal
Revenue Code, instructs the IRS to release otherwise-
confidential tax returns or return information to three
congressional tax committees--the Senate Finance Committee,
the House Ways and Means Committee, and the Joint Committee
on Taxation--upon written request from the chair of any of
those panels. The statute also instructs the IRS to release
returns or return information to other congressional
committees under a narrower set of circumstances.
The key language regarding the receiving committee's
confidentiality obligations lies in Section 6103(f)(4). That
paragraph says that any return or return information obtained
by the Senate Finance Committee, House Ways and Means
Committee, or Joint Committee on Taxation ``may be submitted
by the committee to the Senate or the House of
Representatives, or to both.'' It goes on to say that any
return or return information obtained by another committee
``may be submitted by the committee to the Senate or the
House of Representatives, or to both, except that any return
or return information which can be associated with, or
otherwise identify, directly or indirectly, a particular
taxpayer, shall be furnished to the Senate or the House of
Representatives only when sitting in closed executive session
unless such taxpayer otherwise consents in writing to such
disclosure'' (emphasis added).
Some textualist judges and justices are fond of the Latin
phrase ``expressio unius est exclusio alterius'': the
expression of one thing is the exclusion of the other. But
one doesn't need to be a textualist--or a classicist--to
recognize the importance of the contrast between the two
submission provisions. Absent the taxpayer's consent, other
committees can submit returns to the full Senate or House
``only when sitting in closed executive session.'' The Senate
Finance Committee, House Ways and Means Committee, and Joint
Committee on Taxation can submit returns to the full Senate
or House without condition.
Judge Trevor McFadden of the U.S. District Court for the
District of Columbia reached the same conclusion in his
December 2021 decision rejecting Trump's bid to block the IRS
from releasing his returns. ``It might not be right or wise
to publish the returns,'' McFadden wrote, but the House Ways
and Means Committee has the ``right to do so.'' And if the
House Ways and Means Committee exercises that right with
respect to Trump's returns, its action wouldn't be
unprecedented: In 2014, the House Ways and Means Committee
published return information regarding 51 taxpayers as part
of its investigation into allegations that the IRS had
discriminated against conservative nonprofit organizations
seeking tax exempt status.
In the definitive scholarly treatment of Section 6103(f),
longtime University of Virginia law professor George Yin, who
served as chief of staff of the Joint Committee on Taxation
from 2003 to 2005, concludes that the choice to allow the
three tax committees to publish private tax information was a
``conscious decision'' by Congress. Prior to 1976, Yin
explains, the president--along with the three congressional
tax committees--had statutory authority to make return
information public. A 1976 amendment eliminated the
president's authority to publicize return information but
preserved the power of the three tax committees. ``Congress
no doubt felt compelled in 1976 to preserve some outlet for
Congressional disclosures to the public,'' Yin writes, and it
``was natural to give this authority to the tax committees.''
On top of all this, the Speech and Debate Clause immunizes
lawmakers from liability for statements they make in
committee and on the House or Senate floor. So even if it
weren't for Section 6103(f)(4), a Ways and Means Committee
member could--without legal consequence--read Trump's tax
returns aloud, line by line, with the C-SPAN cameras rolling.
But House Democrats don't need to rely on constitutional
super-immunity here: The relevant statutory provisions
clearly empower the Ways and Means Committee to enter Trump's
tax returns into the public domain.
The Hard Question: Should House Democrats Make Trump's Tax Returns
Public?
Before delving into the normative question of whether the
House Ways and Means Committee ought to publish Trump's tax
returns, let's clear three points out of the way.
First, presidents ought to release their tax returns.
Disclosure of presidential tax returns helps to dispel the
pernicious notion that taxpaying is only for the ``little
people.'' Disclosure also helps voters and lawmakers evaluate
presidential conflicts of interest (for example, by revealing
whether presidents would benefit personally from their
administrations' tax proposals). Finally, disclosure serves
as a check on improper presidential influence over the IRS.
By virtue of their position at the apex of the executive
branch, presidents are the nation's tax enforcers-in-chief,
but they are also taxpayers against whom the federal tax laws
may be enforced. Disclosure helps to reduce the risk that
presidents will exploit their dual roles to their own
pecuniary advantage.
Second, the Trump administration should have allowed the
IRS to release Trump's tax returns to the House Ways and
Means Committee when Chairman Neal requested those returns in
April 2019. Section 6103(f)'s instructions are clear: ``Upon
written request from the chairman of the Committee on Ways
and Means'' or the chair of the other congressional tax
panels, the treasury secretary (or the IRS commissioner as
the secretary's delegee) ``shall furnish such committee with
any return or return information specified in such request''
(emphasis added). The statute makes no exception for cases in
which disclosure might embarrass the president. And while
case law suggests that the executive branch may reject an
information request from Congress if the request does not
further a ``legitimate task of Congress,'' Neal's April 2019
request manifestly stated a legitimate basis: so that his
committee could conduct oversight of the IRS's presidential
audit program and, if needed, consider legislative reforms
related to presidential audits.
Third, the litigation over Neal's April 2019 request
shouldn't have dragged on for as long as it did. It was
nearly three and a half years ago--in July 2019--when the
House Ways and Means Committee first asked a D.C. federal
district court to order the IRS to hand over Trump's returns.
The lengthy delay in resolving that litigation meant that
Trump could effectively evade congressional oversight of the
presidential audit program for the duration of his term.
Fault for the delay lies at the feet of multiple people-and
Neal himself bears some culpability for waiting until April
2019 to submit his request and until July 2019 to file his
lawsuit rather than seeking the returns immediately after
Democrats took control of the House in January of that year.
However one allocates blame, though, it shouldn't take three
and a half years for the federal courts to confirm that the
word ``shall'' in Section 6103(f) really means ``shall.''
But here we are in December 2022, and over the course of
the three-and-a-half-year fight over Trump's returns, Neal
and other members of the House Ways and Means Committee made
several statements that constrain their options now. In the
initial April 2019 letter requesting Trump's returns, Neal
said his committee needed the documents ``to determine the
scope'' of the IRS's audit of the president ``and whether it
includes a review of underlying business activities required
to be reported on the individual income tax return.'' As
recently as last month, the Ways and Means Committee told the
Supreme Court that its document request ``is well-tailored to
illuminating how the IRS conducted any audits of Mr. Trump
while he was President and whether reforms are needed to
enhance the IRS's ability to audit Presidents in the
future.'' Throughout the litigation, Neal and the House Ways
and Means Committee adamantly denied that ``the request is
driven by exposure solely for the sake of exposure'' (as
Trump had argued). In a June 2021 letter to Treasury
Secretary Janet Yellen and IRS Commissioner Charles Rettig,
Neal put it succinctly: ``There have been claims''--including
from Trump himself--``that the true and sole purpose of the
Committee's inquiry here is to expose President Trump's tax
returns. These claims are wrong.''
Plainly, the House Ways and Means Committee is not going to
be able to carry out a thorough evaluation of the IRS 's
presidential audit program in the four and a half weeks
between now and the GOP takeover. The committee's document
request is extensive: It has asked for returns filed by Trump
and seven of his business entities from tax years 2015
through 2020, a status report for each audit, and
administrative files such as examiner workpapers associated
with each of the Trump returns. With competing demands for
the attention of committee members and staffers (including a
Dec. 16 deadline to avert a government shutdown), reviewing
those documents may consume the better part of the next four
and a half weeks. But even after the committee reviews all
those documents, it will still need more information before
it can complete the comprehensive assessment of the
presidential audit program that it has promised.
For example, the committee will need to know how the IRS's
handling of items on Trump's tax returns compares to the
service's treatment of similar items on returns filed by
other high-net-worth business owners who weren't president of
the United
[[Page H9998]]
States. If the IRS allowed Trump to claim an inflated
charitable contribution deduction for a conservation easement
at his golf course in Westchester County, New York, is that
because examiners gave special treatment to Trump, or is it
because the service generally lacks the resources to
challenge conservation easement appraisals? The committee
also will likely need to hear testimony from IRS examiners
involved in the presidential audit program. Did they
personally experience improper political influence? And the
committee will need to compare the audits of Trump's returns
to audits of other presidents and vice presidents. For
example, when Joe Biden became president, did the IRS go back
and review Biden's aggressive use of a self-employment tax
loophole to save hundreds of thousands of dollars on his and
his spouse Jill's 2017 and 2018 returns? While Biden--unlike
Trump--released his returns voluntarily, we don't know what
happened to those filings after they entered the IRS audit
vortex.
To be sure, the House Ways and Means Committee could begin
its review of the presidential audit program now and then
release everything it has when the clock strikes noon on Jan.
3, like a test-taking student who drops her pencil mid-
sentence when the proctor says ``time's up.'' Trump's tax
returns and additional information collected by the committee
would then enter the public domain, allowing journalists and
others to probe further. If Neal and the House Ways and Means
Committee had said all along that their purpose was to
vindicate the principle of presidential tax transparency
using the powers at their disposal under Section 6103(f),
perhaps that course of action would be justified. Indeed,
releasing Trump's tax returns for the sake of releasing
Trump's tax returns might not be such a bad thing--given all
the arguments for presidential tax transparency outlined
above.
Yet Neal and the House Ways and Means Committee insisted
all along that their motive was not exposure for the sake of
exposure. That was a strategically wise thing to say for
litigation purposes, but the statement circumscribes what
they can (or, at least, should) do next. Neal and the House
Ways and Means Committee would undermine their own
credibility--and could be seen as hoodwinking the courts and
the public--if they proceeded to release the returns outside
the context of a comprehensive review of the presidential
audit program.
Can the Senate Take Over?
Enter stage left: the Senate Finance Committee. While the
Republicans who take control of the House Ways and Means
Committee in January are exceedingly unlikely to continue the
Democrats' inquiry, the Senate Finance Committee under the
leadership of Chairman Ron Wyden (D-Ore.) is quite capable of
conducting the comprehensive review of the presidential audit
program that House Democrats won't be able to complete. Wyden
will have to send his own written request to the IRS for
Trump's returns, but this shouldn't be much more than a
formality: Wyden could send the request this morning, and the
IRS could send the documents back this afternoon. There is no
requirement that Wyden or the IRS even inform Trump of the
request before the IRS fulfills it. By the time Trump could
file a lawsuit to stop the IRS from complying, Wyden already
would have the documents in hand. In any event, a lawsuit by
Trump to stop the IRS from fulfilling Wyden's request would
be frivolous given the D.C. Circuit's decision resolving the
issue in the House litigation--and almost certainly would be
dismissed much more quickly than Trump's earlier bid to block
the House.
Section 6103(f)(4) also allows Neal, as chair of the House
Ways and Means Committee, to appoint agents to examine the
returns that he has obtained through his request. In theory,
Neal could appoint Senate Finance Committee staffers--or
Chairman Wyden himself--as the House committee's agents. But
Neal's GOP successor as House Ways and Means chair could
revoke that appointment, ending the Senate's inquiry in
midstream. Thus, the better course of action is clearly for
Wyden to issue his own written request for the returns on the
Senate Finance Committee's behalf.
In sum, even as the window closes for the House Ways and
Means Committee to conduct a comprehensive review of the
presidential audit program, Congress still can comb through
Trump's tax returns and determine whether the IRS fairly and
fully audited the former president. It would be in a
different chamber of Congress--the Senate, not the House--but
Trump would nonetheless be subject to legislative branch
scrutiny.
Hopefully, House Democrats will recognize that deferring to
their Senate colleagues is preferable to reneging on their
own word and publishing Trump's returns outside the context
of the presidential audit program review that they promised.
If, instead, House Democrats release the returns now, Trump
and his supporters will charge Democrats with duplicity for
saying one thing in litigation and doing another thing
afterward--and the charge won't be entirely baseless. That
would, perversely, allow Trump to transform the matter of his
tax returns from a political vulnerability for him to a
potential liability for Democrats. And beyond questions of
political strategy, promise-keeping is--of course--an
important value in itself.
So yes, presidents should release their tax returns, but
that doesn't release House Democrats from the avowals about
their motives that they have made since 2019. In their last
weeks in the majority, House Democrats have another
opportunity to demonstrate why they deserve the nation's
trust. They should seize it--even if that means those of us
who have been waiting for years to know what's buried in
Trump's tax returns might have to wait a little longer.
Mr. BRADY. Madam Speaker, I reserve the balance of my time.
{time} 1015
Mr. NEAL. Madam Speaker, I yield 1\1/2\ minutes to the gentleman from
Nevada (Mr. Horsford), who has been a leader on this issue and gave one
of the most moving addresses as the caucus ensued.
Mr. HORSFORD. Madam Speaker, I thank the distinguished chairman, Mr.
Neal, for yielding time and for leading this important legislation. I
also thank him for the opportunity to serve on this important
committee.
I also thank the ranking member for always showing respect in our
deliberations. All the best to you in your future deliberations.
Madam Speaker, I rise today in support of H.R. 9640, the Presidential
Tax Filings and Audit Transparency Act of 2022.
As the chair has said, since 1977, the IRS adopted a policy of
conducting mandatory audits on the President while they are in office
as a check on their power. Disturbingly, our committee found that the
IRS had all but given up and ceased this program under the previous
administration.
As our colleagues on the other side of the aisle have chipped away at
the funding for the IRS, their talent pool has shrunk. They have been
unable to retain the kind of tax and financial experts that are
actually needed to review the complex tax returns of some of the
wealthiest.
Meanwhile, those on the lower income spectrum, especially those with
children who claim the earned income tax credit, are more likely to be
audited. In fact, in reports from our committee, five times more likely
to be audited are those individuals on the low-income spectrum than the
most wealthy.
The evidence is clear: Congress must step in. This is why this
legislation must be passed.
Madam Speaker, I urge my colleagues to vote ``aye'' on this measure
and to put the confidence of the American people in our tax system once
again.
Mr. BRADY. Madam Speaker, I include in the Record an August 2, 2022,
blog post from the Committee on Ways and Means titled: ``New Schumer-
Manchin Bill Will Supercharge Long History of IRS Abuses.''
New Schumer-Manchin Bill Will Supercharge Long History of IRS Abuses,
August 2, 2022.
Despite a long history of IRS abuses, Democrats have
revived their proposal to send 87,000 new IRS agents after
you and your family-owned business on the belief that
everyone is a tax cheat. The IRS has already been targeting
lower and middle income earners, yet Democrats want to hire
new IRS agents to audit individuals and small businesses.
They've also promised to revive their invasive bank
surveillance scheme.
democrats want to increase audits for all individuals by more than 1.2
million per year:
A Senate Finance Committee analysis shows the $45.6 billion
for ``enforcement'' would ``predominantly hit taxpayers who
have low (or very low) Adjusted Gross Income. Nothing in the
proposal would change that fact.''
Nearly half of the audits would hit Americans making
$75,000 per year or less.
Low-income taxpayers making up to $25,000 per year would
see more audits too.
Despite a clear need for greater taxpayer customer service
amidst a historic tax return backlog, only $3.2 billion of
Democrats' $80 billion is earmarked for that purpose.
Supercharging the IRS will lay the groundwork for the
monitoring the Biden Administration has pledged to impose.
Top Biden officials have made clear they have not given up on
implementing IRS bank surveillance.
Overly broad IRS targeting spanning decades has claimed many victims,
and Democrats are trying to revive it.
Former IRS official Lois Lerner apologized in 2013 that Tea
Party groups and other groups had been targeted for audits of
their applications for tax-exemption, which effectively
delayed that status until they could no longer take effective
part in the 2012 election. The Treasury Inspector General
found that ``Inappropriate Criteria Were Used to Identify
Tax-Exempt Applications for Review back in 2013.
In 1998, the Waslington Post reported that ``An Oklahoma
tax-return preparer, a Texas
[[Page H9999]]
oilman and a Virginia restaurateur told lawmakers how raiding
parties of armed agents from the IRS Criminal Investigation
Division barged into their homes or offices, frightened their
employees and families--and ultimately came up empty-
handed.''
``Two of the men said they later found that former
employees had precipitated the raids, and that the IRS had
done little or no checking on their informants' credibility.
The third witness said he never could determine why he was
targeted.''
In 1997, CNN reported testimony from an expert that the IRS
was ``the best secret-keeping agency in our government today:
``I discovered that the IRS does keep lists of American
citizens for no reason other than that their political
activities might have offended someone at the IRS; about how
the IRS believes that anyone who offers even legitimate
criticism of the tax collector is a tax protester; about how
the IRS shreds its paper trail, which means that there is no
history, no evidence and, ultimately, no accountability.''
Robert Schriebman, a tax professor at the University of
Southern California and author of eight books critical of IRS
practices and procedures, decried the agency's ability to
ignore citizens' due-process protections. ``The IRS can take
a taxpayer's home by just the signature of the district
director alone,'' he said.
These abuses led to numerous attempts at overhauling the
agency, and the latest still has not yet been implemented.
Irs agents have wrongly seized millions from small businesses when
given the opportunity
In an apparent show of strength, past IRS actions led to
the seizure of more than $43 million from bank accounts of
hundreds of small businesses; the results of those actions in
a recent case led to local wedding dress shop being
permanently shut down.
Only after intense pressure from Congress did the IRS
return the money that had been taken to some of the
businesses, including a Maryland dairy farmer.
IRS political leaks have been a problem whenever Democrats have been in
the White House
The last time President Biden was in the White House in
2011, Democrats pushed for billions more in enforcement
without providing clear, independent analysis supporting the
funding, relying on information provided by activist groups
aligned with their political objectives, and the IRS, which
stood to gain funding.
Prior to the 2021 leak, ProPublica previously received (and
published) leaked taxpayer information from the IRS in 2012
that just so happened to include critics of the Democrat
administration.
Political targeting By IRS threatens religious organizations and
critics alike
The IRS initially denied a Christian organization tax-
exempt status because its emphasis on certain ``Bible
teachings are typically affiliated with the [Republican]
Party and candidates.''
This is particularly concerning given the agency's prior
history of targeting tax exempt groups for additional
scrutiny based on their perceived political affiliation.
Recently, Democrats in Congress asked the IRS to increase
scrutiny of groups seeking church status.
IRS mismanagement is well documented
An audit of the IRS itself, conducted from FYs 2010-2012
and published in 2013 found ``inappropriate use of taxpayer
funds being spent on conferences and reviews selected
conferences to determine whether the conferences were
properly approved, and the expenditures were appropriated.''
Another audit in 2019 found that the IRS wasted millions of
dollars on software licenses it purchased but never used due
to mismanagement of IT contracts and systems updates.
Despite the Biden Administration's claim that more money
will increase IRS audits and increase revenue from wealthy
individuals and corporations, the Inspector General actually
found that after spending $22 million and 200 hours auditing
large businesses, the IRS was unsuccessful in bringing in
money to the Treasury from those audits nearly 50 percent of
the time.
Mr. BRADY. Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Green), who has energetically spoken about this issue in the past
and will, I am sure, in the future.
Mr. GREEN of Texas. Madam Speaker, and still I rise. I rise today
because I believe we have a duty, a responsibility, and an obligation
to protect the great and noble American ideals that are the foundation
of this country.
We have a duty to protect what John Adams, the second President,
brought to our attention, that we are a country of laws, not men, and
what Teddy Roosevelt, the 26th President, brought to our attention,
that no one is above the law.
The President has awesome authority. The IRS is under the auspices of
the executive branch. We must put in place laws to assure us that there
are no conflicts of interest being perpetrated by a President who has
control of the agency that is supposed to audit his taxes.
We have a duty, a responsibility, and an obligation. I thank Mr. Neal
for living up to the duty, the responsibility, and the obligation.
I respect my friend on the other side from Texas. We disagree. I wish
him the best. But we have to go on, and the country needs this
legislation. I encourage my colleagues to support it.
Mr. BRADY. Madam Speaker, I include in the Record a 2017 House report
where the chairman said: ``Committee Democrats remain steadfast in our
pursuit to have [President Trump's] individual tax returns disclosed to
the public,'' which can be found at: https://www.congress.gov/
congressional-report/115th-congress/house-report/73/1
Mr. BRADY. Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentlewoman from
Texas (Ms. Jackson Lee), who has been outspoken on this issue, as well.
Ms. JACKSON LEE. Madam Speaker, it is good in this season to be
surrounded by truth.
Let me rise to support H.R. 9640, the Presidential Tax Filings and
Audit Transparency Act of 2022, because this is a necessity.
When the Committee on Ways and Means investigated the IRS' execution
of its mandate to audit the taxes of a sitting President, they found
that, during the Trump administration, the IRS has been in serious
dereliction of its duty to audit the taxes of Donald Trump when he had
been President. In fact, we have found and believe that at one time he
paid zero.
I don't want to necessarily focus on Donald Trump, but he happens to
be at the core issue of the fact of: Are we an equal society? The
Committee on Ways and Means has emphasized that we are.
It leads us to the obvious questions of: Why? Did the IRS simply
forget to do it? Did someone misplace his tax returns? Did the auditor
of Presidential tax returns retire?
I think this legislation is imperative because it must be a general
perspective that transparency is for everyone.
Let me be very clear: There are hardworking members of the IRS,
hardworking members of that team.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Mr. NEAL. Madam Speaker, I yield an additional 30 seconds to the
gentlewoman from Texas.
Ms. JACKSON LEE. Madam Speaker, we know and see them all the time.
Madam Speaker, in addition to the dereliction regarding the audit of
Donald Trump, we have heard that if you are a schoolteacher, you are
audited.
I want to say to the IRS Commissioner: You are derelict in your
duties. You are derelict in your sensitivity to constituents, to calls
from Members, and you are derelict in your duty as to what you are
supposed to do as related to the President of the United States, not
only because he was President but because he was an individual who
continued to ignore the laws of the land.
I said today was a day of truth in this holiday season. This
legislation will bring truth and respect. Let's see those tax returns,
and let the IRS do its job on behalf of the American people.
Madam Speaker, I rise in strong support of H.R. 9640, the
Presidential Tax Filings and Audit Transparency Act of 2022.
This legislation arose by necessity. When the Ways and Means
Committee investigated the IRS's execution of its mandate to audit the
taxes of a sitting president, it found that, during the Trump
administration, the IRS had been in serious dereliction of its duty to
audit the taxes of Donald Trump when he had been president.
This was especially troubling because, based on publicly known and
commonly held information, Donald Trump's activities and investments
presented a wide range of questionable and potentially problematic tax
issues, to a far greater degree than any previous president.
Donald Trump's taxes are the prototypical example of why the policy
was established in the 1970s that required the IRS to audit the taxes
of a sitting president.
And yet, as the Ways and Means Committee found, it did not happen,
either never being initiated or never being completed.
It leads us to the obvious question: Why?
Did the IRS simply forget to do it?
Did someone misplace his tax returns?
Did the auditor of presidential tax returns retire?
While we don't know the exact answer, the IRS's failure to conduct
its statutorily mandated audit of the president's taxes raises the
possibility of a nefarious reason for the failure.
[[Page H10000]]
Given the well-documented, extensive, and repeated malfeasance that
was endemic to the presidency of Donald Trump--including all of the
evidence presented during his two impeachment trials and his attempt to
obstruct the effectuation of the 2020 election and subvert the
Constitution, as exposed by the January 6th Select Committee--it is
obvious that Trump had little or no interest in personally adhering to
the law.
Because of that, Congress would be naive to believe that the IRS's
failure to audit Trump's taxes was merely an administerial error.
Whether the failure was due to a specific instruction that was
transmitted directly to the IRS leadership, or an implied directive
that was recognized, or possibly some other means of observing or
conveying Trump's wishes, it would be foolish to ignore the possibility
that a president who flouted the law with impunity on so many occasions
had instead, in total contrast, insisted on strict adherence to the law
in connection to the audit of his personal taxes, and that his views
played no part in the failure of the IRS to audit his taxes.
This obvious observation is accentuated by Trump's public statements
displaying his antipathy to paying his fair share of federal taxes.
Perhaps most resoundingly, during a 2016 debate, he said that, by
paying nothing in federal taxes over a series of years, ``That makes me
smart.''
All of this pertinent background underscores the obvious basis for
the legislation that we are now considering: Congress must ensure that
the failure by the IRS to audit a sitting president's taxes Never
Happens Again.
This bill codifies the requirement that the IRS conduct and complete
an audit of the sitting president's taxes each year, and publicly
disclose certain information about its findings.
The bill also requires the IRS to audit any additional filing by a
former president that relates to a year in which he or she had been in
office.
Since it is the responsibility of Congress to ensure that the tax
code is administered fairly for every American, it is especially
important that Congress apply that to the most powerful American at any
given time: the president of the United States.
Fairness requires even-handed application of the law to everyone,
including those with the most influence over our governmental
institutions.
Failure to adhere to this precept would subordinate public confidence
in our democracy the whims of the person who presides over the entire
executive branch of our government.
Failure to abide by fairness in the enforcement of our tax code would
negate fairness as a fundamental American principle.
Failure to apply the tax code to the president in an even-handed
manner, just like it applies to other Americans, would assert
acquiescence of justice and the rule of law to Machiavellian,
autocratic, narcissistic personal interests and personal power.
That may be how things work in countries run by monarchs, but that's
not how the United States works.
In fact, it is antithetical every stroke of the quill that composed
our Constitution.
Madam Speaker, I strongly support this legislation because it is
necessary and appropriate, and it effectuates bedrock American
principles.
I urge all my colleagues to vote YES on this bill to empower the IRS
to do its job--free of fear or favor--and remind every future president
that he or she is subordinate to the Constitution and the rule of law,
just like every other person in our country.
The SPEAKER pro tempore. Members are reminded to address their
remarks to the Chair and not to a perceived viewing audience.
Mr. BRADY. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I would note that, every year, President Trump's tax
returns were under audit and that the tradition of making Presidential
tax returns public is just that, a tradition, not a law, and unrelated
to the Presidential audit program.
I would also note that while I have loved serving with my colleagues
from Houston, I would note that they were among the very first Members
of Congress to introduce impeachment resolutions against this President
in the very first year of his Presidency, revealing that this is
political targeting and nothing else.
Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I yield myself such time as I may consume.
Before I finish my time here, I do thank Kevin Brady. We had an
excellent relationship at the committee. I can speak for all the
Democrats on the committee that they had high regard for Kevin Brady
when he was in the majority and when he was in the minority for the way
he allowed the minority, us at the time, to use the time that was
allocated to us. I never thought during that time that Mr. Brady did
anything that was mean or malicious.
In addition, I think what is important to point out here, as he did
in his comments, is that we did big things during that time. When you
stop and consider the CARES Act, when you consider what we did in the
health space, retirement and savings, what we were able to do with
USMCA, all of that was done in a bipartisan manner. I think part of it
is a reflection of his personality, which fundamentally lacks malice.
Madam Speaker, I reserve the balance of my time.
Mr. BRADY. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, I include in the Record an October 2018 article, 4
years ago, from the San Francisco Chronicle, where the Honorable Nancy
Pelosi said to expect Democrats to immediately try to force President
Trump to release his tax returns if they take back the House in
November, exposing the true purpose of this effort.
[From the Bloomberg Government, Oct. 11, 2018]
SF Chronicle: Pelosi: Trump's Tax Returns are Fair Game if Democrats
Win House
(By John Wildermuth)
Expect Democrats to immediately try to force President
Trump to release his tax returns if they take back the House
in November, Minority Leader Nancy Pelosi said Wednesday.
Demanding the president's tax returns ``is one of the first
things we'd do--that's the easiest thing in the world. That's
nothing,'' Pelosi told The Chronicle's editorial board in an
hour-long interview.
Although a 1924 provision of the Internal Revenue Code
gives certain congressional committees the right to request--
and release--the tax records of even the president, it's
unlikely Trump would surrender those documents without an
all-out legal battle. He has refused to release his returns
since he announced he was running for president, arguing
first that he was being audited and later that voters don't
care.
The GOP-led Congress has joined in keeping those records
private, regularly voting down Democratic efforts to make
Trump turn them over.
Forcing Trump to release his returns would not necessarily
make them public, but would allow a Democratic-run
congressional committee to decide whether there is
information in those returns that needs to be investigated.
Whether that happens hinges on Democrats winning the House
or the Senate. With the Nov. 6 election less than four weeks
away, Pelosi sounded confident about both the House
Democrats' chances and her own political future.
``I believe we would win if the election was today,'' she
said. And although more than 50 Democratic candidates have
said they wouldn't vote for Pelosi to lead the House, the San
Francisco Democrat said, ``I believe I will be speaker if we
win.''
Releasing the president's tax returns to a congressional
committee would not be revenge for the way Trump and GOP
leaders have treated the Democratic minority for the past two
years, but a simple matter of oversight by Congress, ``a co-
equal body of government,'' Pelosi said.
``We have to have the truth,'' she said.
Payback isn't going to be part of a Democratic-led House,
Pelosi promised, pushing back against what she called the
``pound of flesh crowd'' of Democrats eager to repay
Republicans for every political slight and attack since Trump
was elected.
``We will seek bipartisanship where we can,'' Pelosi said.
``One of the reasons we should win is that we're not like
them, and we're not going to be like them.''
The Democratic leader also says she doesn't have much
choice. No matter what happens on election day, Trump is
still going to be president and she will have to work with
him.
``We need to get a signature, which requires some
bipartisanship, some common ground,'' Pelosi said, which she
admitted wasn't always easy.
``I, probably more than most people do, respect the office
he serves in, probably more than he does,'' she said. ``But
he is the president--we have to find our common ground. . . .
We want to get results for the American people.''
But that's going to mean discussions and compromise, not
surrender, Pelosi said. Democrats ``will never negotiate away
our values,'' she said.
Pelosi is confident there are areas where Democrats can
reach agreement with Trump and Republicans, as they did when
Republican George W. Bush was president.
Despite disputes over the Iraq War and other issues, ``we
worked together, we disagree and we agreed, and that's the
marketplace of ideas that we live in,'' she said.
Areas where there could be common ground include national
infrastructure improvements, a plan for Dreamers,
undocumented residents who arrived in this country
[[Page H10001]]
as minors, and ways to curb gun violence, Pelosi said.
There's also public support for efforts to allow the
Department of Health and Human Services to negotiate for
lower drug prices, she added.
Pelosi also weighed in on some local issues, saying she
supported San Francisco's efforts to establish a safe
injection site for drug users, something Gov. Jerry Brown
vetoed last month. She also backed changes in federal
marijuana laws, although she admitted, ``I don't see this
president signing any such thing.''
But those concerns are far from the top of the Democrats'
``to-do'' list if they take back the House. ``The first order
of business is the economic security of America's working
families--that is what people care about,'' Pelosi said.
For Pelosi, that concern connects directly with San
Francisco's Proposition C, which would tax large companies to
raise an estimated $300 million a year for homeless programs.
Pelosi said she supports the measure because it's something
the city needs to do. She acknowledged the opposition from
her political ally Mayor London Breed, who has said that
before the city pours millions of dollars more into homeless
programs, ``San Franciscans deserve accountability for the
money they are already paying.''
``I don't disagree with the mayor that there should be
accountability and there should be a plan'' about how to use
the funds, Pelosi said. ``I have great confidence in the
mayor that she can handle it if Prop. C wins.''
Efforts to deal with social problems like homelessness,
hunger and housing insecurity require a new vision from
Congress, she said.
``We have to think in a different way about it, and when we
think big, we have to put our hands in the pockets where the
money is,'' Pelosi said.
Homelessness ``is not an issue, it's a value. It's an ethic
that we have not properly addressed.''
Mr. BRADY. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, Nancy Pelosi is not alone. Democrat after Democrat on
this committee and in this Congress made it clear years ago that they
were targeting President Trump to try to force his tax returns to be
made public, even though the law doesn't require it at all and, as was
revealed in our committee hearing, it has nothing to do with the
Presidential audits.
In fact, in our markup, again and again, we heard from Members who
said we must force these private tax returns to be made public so we
can see his dealings, so we can see his taxes, so we can criticize.
Nothing to do with the Presidential audit process.
That is our concern today, that under the new standard that has been
set, and the Supreme Court has affirmed, two individuals in Congress,
the chairman of the Committee on Ways and Means and the chairman of
Senate Finance Committee, will have nearly unlimited power, with almost
any excuse, to obtain, to investigate, and to make public those very
private tax returns.
We are not alone in our concerns. Other scholars have made the point
that we have a voluntary tax system and that if Americans don't believe
and can't trust that their tax returns won't be kept private, if they
have to worry that if they end up on the enemy's list in Congress, that
they, too, can be a target. Under this new process and this new
standard, the privacy protections of the last half a century are gone.
My worry, and I think the worry of every Republican here, and I hope
some of our Democrat friends, as well, is that this will provide a
dangerous new political weapon that invites political retribution where
that cycle will continue and our politics will be worse, harsher,
uglier, and more divisive because of this action.
Again, at the end of the day, whether a President makes their tax
returns public or not, today it is not the law. While I would recommend
it for all, the truth of the matter is, at the end of the day, this is
political targeting. It can be applied not just to the President but to
every American.
I am worried that it is not just public officials at risk. It is
private citizens. It could be supporters. It could be business or labor
leaders. It could be the Supreme Court that someone seeks to
delegitimize. That is our concern here.
This is why we are fighting this fight as Republicans, to protect the
privacy of every American, to make sure they are not targeted by
partisans in Congress.
I will tell you, I am very worried that every chairman of those two
committees will face incredible pressure to target Americans, political
enemies, and opponents, and I don't think we should ever go down that
road. Regrettably, we are, and that is why we are here.
I have respected Chairman Neal for many years and treasure our
working relationship and the accomplishments we have done. I will miss
you, friend.
Before we conclude today, I want to say a special thank-you to
several members of the Committee on Ways and Means Republican staff who
have worked so hard on this issue for years: Sean Clerget, Derek
Theurer, Caroline Jones, Molly Fromm, Brittany Havens, Paige Decker,
J.P. Freire, and, of course, the remarkable staff director of the
Committee on Ways and Means Republicans, Gary Andres. He has done a
great job for this committee and this country.
Madam Speaker, I yield back the balance of my time.
Mr. NEAL. Madam Speaker, I yield myself the balance of my time for
closing.
The constant theme that we have heard today from our Republican
colleagues is that this is about targeting an individual. This is a
chance to clarify the law that they suggest is currently in a
convoluted stage, which means that there is, in their judgment,
sufficient confusion about the law as to whether or not the process
should play out.
What this legislation argues, I think, with great proficiency is the
following, and that is that we should codify the system that we have
discovered in recent days is not only dysfunctional but is nonexistent.
Nine out of the last 10 Presidents of the United States have
voluntarily released their tax forms. It dates to Richard Nixon in a
letter to the then-chairman of this committee, Wilbur Mills.
Barack Obama and Joe Biden have both indicated they have been fully
audited. What we are suggesting today is that this is an opportunity to
clear up the question of how the mandatory audit that is highlighted in
regulations at the IRS plays out.
By the way, when we say it is not in law, this institution here
functions on the basis of rules as well as law. The rules in the IRS
manual said that the audit ought to take place. We have discovered that
not only did the audit not take place but it hasn't even been
completed.
A reminder: This is not about a President. This is about the
Presidency going forward.
{time} 1030
This was not done with malicious intent. It was not done in a
clandestine manner. It was this chance to say, okay, if there is a
legitimate argument about how the mandatory audit system plays out,
let's straighten it out this morning. Easily done and accomplished.
Paying taxes is a core responsibility, a reflection of our faith in
common citizenship.
Despite the idea that we talk about a voluntary system, treasure the
idea that about 87 percent of the American people pay their taxes on
time. That really speaks, I think, to the intent and sincerity that
they feel about a functioning government. All of us are expected to
fulfill that responsibility.
In exchange for voluntary compliance, we have to be assured that a
fair and well-functioning system ensures that everyone else is
cooperating, too. This shouldn't be the kind of country that allows
those with power and privilege to be held above the law that applies to
everyone else. That is not part of our national character. That is not
our ethic as a people.
Here, no one, no matter how powerful, should be out of the reach of
the tax system, least of all not in compliance with our tax laws.
The IRS failed its own policy to audit a President in an affront to
our shared sense of justice and fairness. Everybody on this occasion
acknowledges that, the audit did not take place. And no audit has been
completed 3 years later.
The legislation before us, H.R. 9640, rectifies the situation. It
offers great clarity.
Madam Speaker, I urge all of my colleagues to support this
legislation, and I yield back the balance of my time.
Mr. PASCRELL. Madam Speaker, I was the first member who advocated for
reviewing and releasing Donald Trump's tax returns. I've been on this
quest for nearly 6 years.
I applaud Chairman Neal for fighting until the very end. This was not
about 1 man. The law was always on our side.
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Our committee investigation makes crystal clear why Trump and his
cronies obstructed our work. Trump's handpicked Treasury Secretary and
IRS head were at best derelict. At worst they were corrupt and
criminal.
Trump paid a pittance in taxes for years. He overinflated losses to
shirk his duty as an American citizen.
Trump's government failed to conduct a mandatory review of his tax
records. They broke the law.
We provided the IRS with funds to prevent tax cheats from abusing our
tax code. Now, we must ensure the IRS cannot meddle with the audit
process and presidential returns are made public.
Americans must have faith that our tax system is fair. No one is
above the law. It is time to act.
The SPEAKER pro tempore. Pursuant to House Resolution 1529, the
previous question is ordered on the bill.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. BRADY. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
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